Tuesday, May 17, 2011

http://tiny.cc/s37b0Transforming the global air transportation system (ATS) from ground-based communications and radar control to satellite-based navigation systems will generate significant savings for airlines and passengers, according to a new Deloitte business case study. Specifically, the upgrade could cut fuel consumption by three billion gallons, eliminate 29 million metric tons of carbon emissions and reduce four million hours of delay, resulting in overall annual savings of $29 billion in the United States and $135 billion globally.

Deloitte’s “Transforming the Air Transportation System – A Business Case for Program Acceleration” study estimates the net present value of deploying the program globally as scheduled by 2025 for the U.S. Federal Aviation Administration (FAA) NextGen, European Union (EU) SESAR and other global programs is $897 billion through 2035, the end of the study period. It also evaluated the financial impact if the programs were accelerated, as well as if they were delayed.

Deloitte’s research shows that the acceleration of global ATS transformation programs will increase net present value by $100 billion, if completed by 2020. This translates into $20 billion additional value for NextGen, $51 billion additional value for SESAR and $29 billion additional value for the rest of the world. Alternatively, the study found that delaying implementation by five years could decrease the net present value of the programs globally by $148 billion.

Conversely, the study also reveals that program acceleration, let alone implementation by 2025, has potential risks in funding, technology standardization, maturity and integration, public policy agreement, air traffic control (ATC) procedures and training among activities required to make the program successful.

“The successful transformation of the ATS, which entails addressing significant underlying technical and financial challenges, would help realize the significant value that this global initiative offers government, industry and the public,” said Allen Hockenbury, with Deloitte’s Federal Government sector practice.

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